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How much are you worth dead?

Posted by Our Secret Benefits Consultant on Nov 27, 2018 12:27:43 PM

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Do you know? Does your family know? Is it even important?

Well the answer is yes, it is. Not knowing what you are worth dead could leave your beneficiaries in the dark about what they are entitled too. Here’s why.

Most employees working for a company will have life insurance, typically set at four times salary. However, over the years people can build up several pension pots; maybe have an endowment policy tied to an old house now sold but which they will continue paying until its matured, as well as other savings they’ve forgotten about.

But it’s important for people to keep track of all their savings plans and policies to ensure their beneficiaries receive the correct amount when they die. The issue for most of us is we don’t like thinking and talking about dying – particularly with our immediate family.

I worked on a case a few months back which made me think about the impact it has when people don’t receive the money they are entitled to. An employee had died of a heart attack fairly young. His wife and family were devastated and I worked closely with them on what was a straightforward life insurance claim.

Soon they were sent a cheque for £92K which the wife was delighted with and assumed that was everything she was entitled too. She was right in this case and she was now able to plan her life ahead with this money.

But there are many beneficiaries who just accept what is given, especially as they are usually fairly high amounts and people are just grateful for getting a large cheque at what is a very emotional time.

However, most people have no idea what their partner could have in legacy benefits and pensions because they simply weren’t told and these could be life changing amounts and alter how they live their life in the future.

Imagine if the wife who got £92K knew that her husband actually had another £200K in benefits and savings that no one knew about.

That could be the difference between her being able to give up work to concentrate on bringing up the kids or send them to private school or university. Life could be very different if people ended up with the full amounts they were entitled to.

My advice therefore is to make sure your employees know what they are worth dead and document everything they have in terms of policies and savings. Encourage them to have the difficult conversation with their family too so everyone knows.

One thing in life that is certain is that we’re all going to die so it makes a lot of sense to get everything in order before it happens. It also shows the company cares for their employees and wants to make sure their families get everything they are entitled too.

Remember your benefits consultant is well versed in such matters and can offer advice on how best to approach this delicate subject with your employees. Planning for death is never pleasant but it will ensure families receive what they are owed.

Topics: HR, life insurance